By Jesse Phillips
In between two jobs and other extracurricular activity, I’ve been trying to fulfill my duty as a political commentator. Amidst all of the chaos and convoluted spin of the mainstream media, let me provide some analysis from the vantage point of a rock-solid fiscal conservative:
1. Framing the debate
Keep in mind that the Democrats, with full control of all three branches of government, did not even pass a budget, much less a balanced one. The GOP, with control of only 1 of 3 branches, has not only forced movement toward passing a budget, but is moving toward a balanced one at that.
This is where the Balanced Budget Amendment, although it will never be signed into law, is a brilliant political maneuver. It places the burden of proof on fiscal liberals to demonstrate exactly how the budget is going to be balanced, if not through an amendment.
If the GOP were to start the negotiations saying, “We need to cut spending and maybe balance the budget at some point,” then Democrats could wink and nod and throw them a few spending cut bones.
However, by saying, “We’re going to pass an amendment to our Constitution that forces us to do this,” puts the Democrats on the defensive. Suddenly $60 million spending reductions over ten years don’t carry as much weight when the other side has passed a law to require a $14 trillion deficit to be wiped away.
Now the issue is not if but how to best balance the budget. Democrats are having to scramble to show exactly how they are going to balance the budget, when last year they didn’t even pass one.
That’s no minor accomplishment for a group that only controls one-third of the government. Actually, that’s more of a Tea Party accomplishment, which only controls one-half of one-third of the government!
2. Loopholes versus tax rates
I’m not sure how this is all going to play out, but I think it’s important to note the difference between loopholes and tax rates.
The tax rate applies to everybody. Loopholes, however, apply to select special interest groups. A loophole is a special exception to the rule negotiated by Washington insiders deep enough into the political class to embed language in the tax code that gives them a financial advantage in the private sector.
Typically the creation of these loopholes are repaid in financial contributions to the lawmakers who help write them.
In terms of raising revenue, various plans seek to raise revenues by either raising tax rates or closing loop holes. There is some media spin that attempts to portray Republican attempts to close loopholes as raising taxes.
Closing a loophole is not the same as raising rates. Eliminating the exceptions to the rule is not the same as changing the rule. In principal, I am in favor of closing loopholes, and I think every fiscal conservative should be. Loopholes exploit the system and gives the political class financial advantage over the private sector entrepreneurs. (I’d even go so far as to say we should close every loop hole by passing the Fair Tax, but that’s for another day.)
Will closing loop holes actually raise revenue? In theory, closing a loop hole could increase revenue, if the behavior of those who had been using the loop hole doesn’t change. But, given the lobbying prowess required to exploit loopholes, the political class will likely change their behavior in a way that doesn’t increase revenue. Time will tell on that one, but closing loopholes is still the right thing to do, in my opinion.
I’ve said before, and I’ll say again, that I support Coburn’s 9-trillion dollar plan. You should read it through. It’s amazing the waste that there is in our system. Unfortunately, the most we’re going to get from fiscal liberals is 3.7-trillion in the best case scenario.
It’s a start though. At least the debate has been successfully framed.
Rock solid conservative, you are.
Reagan taxed the rich higher than Obama for most of his presidency, grew government, tripled the deficit, and raised taxes 11 times. But Obama is a “socialist?”
What we do KNOW are the lessons of history that we learn by FACTS. Reagan presided over an unemployment increase after cutting taxes for the rich but raising them for the middle class and the poor.
This isn’t about political theory, or economic forecasts. It’s about learning from facts, which Republicans can’t seem to do. They live in a fantasy where bogus concepts, proven false conclusively by history, continue to dominate their thinking: ‘trickle down,’ ‘taxing the rich kills jobs,’ ‘higher taxes lower GDP,’ etc…
Bush cut taxes, produced less jobs than any modern president.
Clinton raised taxes on the rich, the economy prospered. The right continues to become more radical – to a point right now where Reagan would be considered a socialist by the teaparty. Huckabee admitted that Reagan would today be considered ‘a liberal.’
Me? I’m beginning to not really care. I don’t have much of a dog in the fight. I am 100% debt free, house paid off, in superb health, money in the bank, secure well paying job, state socialized health care, and the Republican Governor just gave us socialist state workers a 3% raise. I’m set. I’m socking thousands away every month. I’m not going to suffer. It’s the unemployed / under-employed, in debt, no health care, middle class renters, elderly, disabled, young people just starting out with families that are going to be suffering.
These poor idiots are the tools of the GOP establishment mindset (represented by Tea-vangelicals like Jesse). They’ll cut their own throats and vote GOP because they’re brainwashed to do so by the conservative media shills. While the GOP policies under Bush have bankrupted America, the Kock Bros. and their ilk – the top tier CEOs – whose salaries have continued to rise amid Wall St. bailouts and housing market collapse, and whose taxes continue to fall, are taking the lions share of income in America, and not really giving much back. Their greed knows no bounds and they know how to play to their base.
The bottom line is: the GOP corporate puppet masters want to put all the sacrifice for the economic recovery on the backs of those poor suffering middle class bastards. The GOP elite thinks they can get these unfortunate fools to vote Republican by diverting attention to wedge issues like gays, guns, NPR, Plan Parenthood, etc… while throwing out demonizing labels like ‘socialist’… when the Obama’s proposed taxes are lower than Reagans.
If the GOP can pull this off, Americans are really stupid. Either way, I don’t give a shit. These are the good times. No new taxes… sounds good to me. More for me. I may vote GOP!
“I’m all right Jack, keep your hands off of my stack….”
Ellen,
You continue to amaze.
I don’t know, I kind of liked “Tea-vangelicals.”
I would say this is more of the problem: Last year, GE “reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States. Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.”
http://www.nytimes.com/2011/03/25/business/economy/25tax.html?_r=2&nl=todaysheadlines&emc=tha2
Reaganomics, guys. Study it. It works. Create as large a pool of middle-income earners as possible. This is done by giving tax breaks to the individuals and companies that create the jobs to pay the middle-income bracket. It’s not rocket science.
GE’s american force = 287,000
287,000 x 75k/year (conservative average income per employee) x 25 percent tax bracket = 5.4 billion tax dollars generated
5.4 billion – 3.2 billion (tax benefit) = 2.2 billion net to Feds
Easy math.
Jason,
You are right, companies are shipping things overseas to get better returns. Why, because in 2011 America has a higher CORPORATE TAX RATE (35%) than every nation in the world except CUBA (40%).
Check it out: http://www.deloitte.com/assets/Dcom-Global/Local%20Assets/Documents/Tax/dtt_corporate_tax_rates_2007_2011.pdf
We’re just not competitive in the global market. It’s cheaper to do business elsewhere, and you as a business owner have the right to do that. Of course, that costs jobs.
And we’re sitting here wondering why unemployment is at record highs? It’s because we’re taxing corporations more than any other country except CUBA!
Lower corporate taxes, make us competitive, bring companies back here, unemployment goes down. That’s all there is to it.
Jesse, you completely missed or ignored Jason’s point. Even though the corporate tax rate is high, many corporations (especially some of the largest ones) don’t pay at 35% at all, even though they do a lot of business in the U.S. It is not a high tax rate that is driving companies overseas, it is the fact that most developing countries do not have laws and regulations in place to protect workers from exploitation. There are so many loopholes and tax incentives that the effective tax rate for corporations is much lower. Many of these massive corporations are not paying their share of taxes and that is a contributing factor to our budget deficit and debt.
You praise Coburn’s plan to reduce the deficit describing savings of “tens of millions” of dollars from halting construction on new courthouses. That’s like saying that you have found some great savings of tens of dollars each that put together will come to 9 million dollars in savings.
The Republican Party is simply not serious about dealing with the deficit. They have completely eliminated raising revenue from the discussion. The only other way to balance the budget would be to fundamentally change Social Security and Medicare, or drastically reduce defense spending, also things the GOP is unwilling or unable to do. The idea that you can balance the budget by curtailing waste and discretionary spending is a fantasy.
Companies move jobs overseas because the labor rate is so much lower. Nothing to do with taxes. I could hire 4 IT techs for the price of 1 in either the Philippines or India. Jobs move within the US because of taxes (just ask California), but they move overseas because of labor rates.
James,
Coborn’s plan saves 9-TRILLION in waste. You should read it. He lays it out fairly well on his senate website. He has a 600 page document (which I haven’t read all of) and some summary documents as well.
It does add up. There is so much waste. Read Coburn’s plan.
We agree that loopholes should be closed (see my article). That won’t change the fact that we have the highest tax rate in the world, and businesses will still move overseas.
Josh,
I agree with you only partially.
Labor rates are tied to cost of living. Cost of living depends on how much things cost to buy. Companies charge based on what it cost them. Every company’s biggest expense (35% minimum) is taxes. Follow the trickle down:
Corporate tax (35%) — $$ –>
Cost of goods services (25-35% avg. embedded tax) — $$ –>
Cost of living
- Jesse P.
I think you should let the architect of Reaganomics ” explain how it affected the US economy.
You should also see how the GOP feels about outsourcing jobs.
I think you should let the architect of Reaganomics explain how it affected the US economy.
Ah, the Stockman argument. Yup. Well, he’s also a huge proponent of bringing the government to a shut down so that he can get his apocalypse he’s been wrongly forecasting for 30 years.
Always been a bit “out there” I’m afraid.
Okay, say I own G.E.. I get hit with a gigantic tax… first thing I do is raise the price of everything I sell. Corporations don’t pay taxes, only people do… again and again and again.
GALLUP POLL
July 28, 2011
Obama Rates Higher Than Boehner, Reid on Debt Situation
PRINCETON, NJ — Americans are more likely to approve of the way President Obama is handling the negotiations to raise the federal debt ceiling than they are to approve of the handling of the situation by Speaker of the House John Boehner or Senate Majority Leader Harry Reid
Obama has a 41% approval on the debt negotiations – 10 points higher than Republican Boehner who rates at 31% approval
http://www.gallup.com/poll/148718/Obama-Rates-Higher-Boehner-Reid-Debt-Situation.aspx
Your blog interface is one of the best I have seen in a long time.
Great read nice to find a blogger who know how to write and knows what they are talking about 10/10
@PhillyYorker: My one obvious drafting mistake this year (so far) was Chris Ray in the 16th round. Outsmarted myself on that one took too many Clever Pills. Oh, well. At least it wasnt Lyons. And I made up for it with Gregg in the 19th.
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Why is the one who is the most critical and seated up on their high horse seem to be the dumbest of the bunch?
Any time a set of rules is agreed upon, there is an implication that rules are necessary, in anything from games to supreme laws. So it seems silly to say that we would found a society based on such principles, and then neglect to do what we think is good for that society, do you not agree?
Thank you, Cliburn folks.
Wow ladiesgreat job with those questionsyou really helped me out with the God of Jacob especially Renees comment of defeating the lie of self-sufficiency. I appreciated Annes comment on idolstimely for me and Kim Ts & Tammis examples of how they handle the lure of idols in their lives.So I will answer this question as it seems to fit with how you have ministered to me and others.2. Comment on the above story in this post from The God of All Comfort?That is a moment of precious memory in your family’s life and also for your church family. It is true, we have a constant enemy, who is determined to destroy. I feel like I have been losing some battles recently. It is a beautiful picture of standing together against the foe.
Each of you are looking deeply at the verses and bringing forth beautiful insights. Thank you!
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We do this in Law. The prosecutor presents the best explanation of the evidence and the defense tries to show why that explanation is wrong. Or if possible police find the real criminal (i.e. a BETTER explanation of the facts). People are executed based on the best explanation.
No, the good of society is a social concept; it does not deal with right and wrong, it deals with desire we all want to live, and we all need the help of others to live longer (such as the sick needing the well, or the impaired needing the senses of those who are not impaired.or a shoemaker requiring the services of a farmer to get food, or vice-versa), and so we set down a society that acknowledges the things we all want. This society is no different; the idea that we should have a right to life, liberty and the pursuit of happiness is based on this kind of ideology, that we all want to live and so if we (a) want to live, and (b) need the services of others to live, then it only makes sense to respect the rights of others so that these things may be guaranteed so that the system may function.
In the role of action, we have a plot that almost disguises itself asbeing clever, which includes explosions and assassins!
Spoilers. I saw the tag team upset about the plot twist and was amazed at those people. I think all this started for real with “The Crying Gameâ€. Hell, I had that one figured out before the second reel was over. If you must be “surprised†at a Broadway Play, what does that say about the writing, the staging and the direction? Nothing good, that is for sure. Too much MTV, not enough SRO.
Ferris Bueller is something 80s kids always pick, Im a 90s one so horror of horrors havent even seen it! Does that make me a bad person?